Thu 24 Aug 2023

Qualified One Way Costs Shifting: The Story So Far

30 June 2023 marked two years since the introduction of qualified one-way costs shifting (QOCS) in Scotland.  Since its introduction, there have been three reported QOCS cases from which some useful observations about its development can be made.

What is QOCS? 

Provision for QOCS was made under section 8 of the Civil Litigation (Expenses and Group Proceedings)(Scotland) Act 2018.  QOCS restricts the pursuer's liability for expenses in personal injury claims.  Provided the pursuer has conducted the proceedings in an appropriate manner, the court will not make an adverse award against the pursuer in respect of any expenses which relate to the claim or any appeal of it should the Pursuer not be successful in their claim. The conduct of the proceedings will be held to be in "an appropriate manner" unless the pursuer, or their representative, either;

(i) makes a fraudulent representation or otherwise acts fraudulently in connection with the claim,

(ii) behaves in a way that is manifestly unreasonable, or

(iii) conducts proceedings in a manner that the court considers amounts to an abuse of process.  If another party to the action, seeks an award of expenses against the pursuer, their motion for doing so must be on the basis of one of these three grounds.

Reported decisions

Lennox v Iceland Food Limited

There have been three reported QOCS decisions at the time of writing.  The first concerned a woman who tripped over shopping baskets at the end of a checkout while shopping.  The action proceeded to a proof that was restricted to liability and contributory negligence.  Decree of absolvitor was granted in favour of the defender.  The defender's position was that an award of expenses against the pursuer was appropriate due to the unreasonable behaviour of the pursuer. 

In support of their position, the defender submitted that the pursuer had acted unreasonably by including a substantial number of averments she had no evidential basis for and failing to lead any positive evidence to prove her case.

In assessing the merits of the defender's argument, Sheriff Fife found the defender's motion to be "ill conceived" stating "it appeared to rest on the contention that the pursuer had no chance, or substantially no chance of success, i.e., that her claim was without merit and that bringing proceedings, and continuing with them, was manifestly unreasonable and/or an abuse of process." 

In his decision Sheriff Fife stated that what amounted to "manifestly unreasonable" conduct should be understood to mean obviously unreasonable and that it is a high test to meet.  Sheriff Fife did not find that the pursuer or her agents had acted in a way that was manifestly unreasonable. Emphasis was placed on the interpretation of the CCTV footage the pursuer relied upon.  The court did not accept the pursuer's submissions on the CCTV, but accepted that there could be different interpretations of the footage.  

He also stated that a distinction should be made between manifestly unreasonable conduct and abuse of process.  Abuse of process takes the form of a pursuer unreasonably initiating or continuing an action where they have no or substantially no chance of success.  That was held not to be the case here and therefore there had been no abuse of process by the pursuer.

Gilchrist v Chief Constable Police Scotland

In the second reported QOCS decision, the pursuer claimed damages for injuries sustained while treating a disruptive patient in her capacity as a clinical support worker.  She claimed that she had been asked by two police officers to apply restraint straps to the patient, and was injured while doing so.  Sheriff Campbell found that she had not been instructed or invited to apply restraints, nor did she actually apply the straps.  Following the proof, the defender moved for an award of expenses seeking to have QOCS disapplied on the grounds that the pursuer had made a fraudulent misrepresentation and/or behaved in a manner that was manifestly unreasonable. 

Sheriff Campbell found that fraudulent misrepresentation is a well-established legal conceptHe held that it was clear from the authorities the bar for fraudulent misrepresentation is a high one, and that a court making a finding of fraudulent misrepresentation would be making a finding that the party had intentionally misled the court.   In his original judgment, Sheriff Campbell had set out his preference for the account given by the two police officers at proof.  He had not made a finding that the pursuer was either incredible or that her evidence was deliberately untrue.   Therefore, the high bar for a finding of fraudulent misrepresentation had not been met.

In terms of the argument that the pursuer had behaved manifestly unreasonably, Sheriff Campbell adopted the approach of Sheriff Fife in Lennox and found that the pursuer had not met the threshold of manifestly unreasonable conduct. 

Elizabeth Love v National Health Service Fife Health Board

The circumstances in the third reported QOCS decision were quite unusual.  The pursuer raised an action on behalf of the estate of her late mother as she wished to pursue a claim for clinical negligence in respect of the care her mother had received from the defender.  The alleged negligence took place on 21 October 2018.  The pursuer did not have title to sue as she had not been appointed as executrix-dative and she did not have a causation report to support her claim, a requirement of clinical negligence actions.  The action was served in December 2022 and was therefore time-barred.  The defender sought summary decree which was granted on 27 April 2023.

At the subsequent hearing on expenses, the defender sought the disapplication of QOCS on the basis that the pursuer and their previous legal representative had behaved in a manner that was manifestly unreasonable in connection with the proceedings, or otherwise conducted the proceedings in a manner that amounted to abuse of process. 

Sheriff Fife referred to the Lennox decision and applied the same test when considering if the conduct of the pursuer's previous legal representative was "manifestly unreasonable".  He held that having regard to all the circumstances of the case, the test was not met.  With regards to whether the conduct of proceedings amounted to abuse of process, Sheriff Fife found that the only procedure had been the motion for summary decree. The motion was granted and the pursuer's agent had no opportunity to continue the action when there was no chance of success.  Therefore the test for abuse of process was not met.  The sheriff was satisfied that the pursuer had not behaved in a way that was manifestly unreasonable, nor had she conducted proceedings in a way that amounted to abuse of process.

Sheriff Fife commented that while the circumstances of this case were unusual, they were not exceptional.  However, had there been further substantive procedure, or the pursuer and their representative had persisted with the action when it had no or substantially no chance of success, Sheriff Fife noted that it may well have been an exceptional case.

What have we learned so far?

Through the reported decisions, we have gleaned some guidance on the court's interpretation of QOCS and the tests that must be satisfied to obtain an award of expenses against a pursuer in a personal injury claim.  While each case will turn on its own specific facts and circumstances, these decisions provide some guidance on what requires to be established in order to disapply QOCS.  A high bar has been set in the reported cases which will be difficult for defenders to satisfy.  In Gilchrist, the court found in favour of the defender's version of events, but the sheriff did not go so far as to make a finding that the pursuer's account was incredible or deliberately untrue and, as a result, QOCS was not disapplied.  It will be interesting to see if the court goes beyond preferring one version of events over the other and making a finding of fraudulent misrepresentation.

The test for a finding of manifestly unreasonable conduct is equally high.  The high bars that have been set may mean that there is a reluctance on the part of defender's agents to raise QOCS arguments.  These decisions do provide helpful guidance on what the defender must demonstrate in order to make a successful argument.  Perhaps this greater clarity will increase the confidence of defenders' agents in running these arguments. 

The reported decisions have been in the All-Scotland Sheriff Personal Injury Court (ASSPIC).  It is hoped that more decisions will be forthcoming.  We will continue to follow the development of QOCS in the Scottish courts closely and with interest. 

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